My wife and I got onto this topic while driving yesterday. We had stopped by Kohl’s, JCPenny, ThePicturePeople stores during the day. A question popped up, “why would they even have such sale where they give away their inventory for 60% off, buy one get one free, kind of deals. Is it not going to be a loss?” and many more questions like this all at once.

My answer was “Volume”

Agreed, I haven’t studied Marketing major in my college, however, with an observation, it sounds very much true. These retail stores make up on Volume sale although the discount appears to be not on all the items or varieties in the store. Our observation has been, with Ads like these, tempts people to go visit. Once they visit at least about 80% of the people do BUY things. I don’t have the survey numbers, and I am sure, the retail merchants would have such numbers, however 80% those who buy would get into Impulsive Buying – and end up buying things they may not really need, but just because things are out for SALE you’ve got to buy them. So true, if one wanted to buy a fleece for 20$ he/she would end up with at least about 100$ charged on credit card when coming out of the store. The other day we noticed an individual charging about 450-500$ and she also said, she ended up charging a lot just because things were on SALE. These stores also have credit cards, and if you apply for a credit card, you would get an additional 10 to 15% off for that day’s transaction. hmm…. how tempting! There are again both pros and cons to it. In a way a win-win situation between retailers and the consumers; and on the other hand, this can be lose-lose or win-lose too depending on the type of consumers who spend their hard earned money.

Agreed, even we have been to similar occasions and have bought some for us. As we analyzed, it was mostly for what we needed, and thankfully, we have learned to say No to ourselves and back off, if we do get into impulsive mode by any chance. The Simple Dollar provides many such pointers on managing money.

I recently read somewhere or heard from people around the term “Steal” –> it was interesting to know that a few percent less than the retail price in the store meant a great bargain and they ended up buying several. Agreed, at the end of the day, it is up to the consumers on what they like and what they like to buy. This post was only about an observation for the traditional sales methods keeping some or the other reason like “after christmas” “pre/post thanksgiving”, “new year”, “year end sale”, “festive season sale” etc etc etc…

How about the Picture Studio – We had received an invitation saying a free sitting session with a free 10X13 print. We went there. There were about 12 – 15 snaps shot and they shortlisted about 6 good ones. We ended up buy 3 more prints. so Volume still worked – went there for a 10X13 print and ended up with more. [Note: the last ones we had taken with our baby was close to about 18months ago, so it was ok for me]. But for people who get these pictures taken evey month or every quarter, it is certainly a tempting expenditure.

On a similar grounds, Nita has a post about Advertising and marketing campaigns [link] taking several examples and situations.

<update>I often hear about SALE – “Oh! this item was on sale in so and so store“. I tend to think and have also asked the store keepers at times, “hmm.. does this mean it is on SALE now and usually available for FREE” That’s my interpretation when I see those words like on-SALE. 🙂